From: owner-canslim-digest@lists.xmission.com (canslim-digest) To: canslim-digest@lists.xmission.com Subject: canslim-digest V2 #3498 Reply-To: canslim Sender: owner-canslim-digest@lists.xmission.com Errors-To: owner-canslim-digest@lists.xmission.com Precedence: bulk Content-Transfer-Encoding: quoted-printable X-No-Archive: yes canslim-digest Monday, August 11 2003 Volume 02 : Number 3498 In this issue: Re: [CANSLIM] for Short Selling RE: [CANSLIM] short selling (WEBX) [CANSLIM] a random thought Re: [CANSLIM] short selling RE: "M" was ([CANSLIM] for Short Selling) ---------------------------------------------------------------------- Date: Sun, 10 Aug 2003 12:46:38 -0700 (PDT) From: Fanus Subject: Re: [CANSLIM] for Short Selling DMC Below is a fraction of the welcome e-mail Jeff sent to each one when you subscribe. Since you are a member for about 10 trading days, this should still be fresh in your mind. - ---Start of quote This is an unmoderated discussion group whose purpose is to provide a forum for individuals to: 1. Discuss the ideas and concepts of CANSLIM. 2. Add to the concepts of CANSLIM from personal experience. 3. Exchange sources of information on the internet that can be used to select stocks using the CANSLIM methodology. 4. Discuss specific equities and how they may or may not meet the CANSLIM criteria. - ---End of quote. I agree with all your points about shorting in bear markets, etc. My point is just that if you are interested to discuss topics other than CANSLIM, there are appropriate groups to do so. If you can make a good arguement on why any kind of shorting is part of CANSLIM, then I would be interested to hear it. If you can't, then I don't understand your insistence to discuss something off topic. You don't go to the dentist after all and insist that he discuss your knee pain with you. There is a right place for everything. I think I have tried to make my point enough now. I will not bore the list again about this topic. Best Regards - - Fanus - --- DMC197807 wrote: > Rolf & Mark, > > My vote (if I get a vote) is why not discuss how to > use canslim ideas to > generate potential shorts? It's not like this > little epistolary group > hasn't gone off the track since I've been here > (about 10 trading days), and > it's not like it takes a lifetime to figure out > Canslim in any event. It's > really rather simple, and with the help of computers > it's almost too easy. > The real difficulty lies in disciplining oneself to > limit or get rid of > longs in sideways and topping markets, and be > willing to reenter when the > market's correction has ended and stocks are ready > to rise again. You can > find the names of candidates very easily for a > little coin paid for a > subscription to IBD and/or a subscription to > canslim.net. > > For short discussions, let's just use the above > referenced subject line > "Re: [CANSLIM] for Short Selling" > > and the purists like Fanus et al (so far it seems to > be all Fanus) can > either eyeball them and delete them, or even program > their Outlook Express > to pre-delete all messages on the peripheral topic. > > I think it would be helpful to understand what kind > of screen would generate > the opposite of good longs in a bad market, if only > for academic, > mind-sharpening purposes. After all, if in > traditional canslim technique > you are looking for 1 or 2 stocks to buy per week in > a good (M!) market, > then why not reverse the order in a bad (M!) market. > > With that in mind, I'd like to explore what kinds of > things people think > would indicate a dangerous market, knowing in > advance that calling a top is > one of the hardest things to do BUT that falls tend > to be so much more > precipitous than climbs that there's gold in those > hills if you can time it > right and buy a put to get into position. > > In any event, VTO has provided a very handy site > with lots of sentiment > indicators: > > http://www.vtoreport.com/sentiment/cot.htm > > If you click on Sentiment and Bull/Bear you can see > a very wide gap between > bullish and bearish advisors, the kind which > indicates a correction is > coming. I'd say anytime you see a gap of 25% or > more (with the bulls on > top) you are looking at a dangerous situation. > > The Put/Call ratio has been very low and is now > climbing. Again danger. > > The VIX has been unnaturally low for a long time, > another coiled spring. > > For COTS, I prefer to use the Quasimodos.com site: > > http://www.quasimodos.com/marketrider/technical.php > > The articles are interesting, and to get the reports > and COTs page, click > here: > > http://www.quasimodos.com/marketrider/charts.php > > You can't paste the sites, but the first 3 on the > right, for the Dow, the > Naz and the SPX have a very interesting graphic > display of the traders' > positions. I don't know exactly what the timing is > on these but the smart > money seems to be betting against this market > continuing, while the small > speculators keep piling on the positions. Good bull > markets (like the one > we had from March to June) often begin with very > small bars. > > DMC > > > > > > > > > > > > From: "Mark Kerson" > To: > Sent: Saturday, August 09, 2003 11:13 AM > Subject: RE: [CANSLIM] short selling (WEBX) > > > > I don't know. > > > > It does not seem inappropriate to discuss using > CANSLIM to short on this > > site. > > > > > > In IBD, Thursday, August 7, 2003, on the front > page of B1, in Investor's > > Corner, the last line of the box under "Advanced > Study" says, "Learn to > > sell shares short during a market decline (see > Feb. 14 Corner)" > > > > It seems possible (at least logical, I certainly > can't claim that I have > > done it or know anyone who has) to reverse the > principles and choose > > shorts. Therefore if someone is interested in > exploring it, well, I > > don't see why we can't. > > > > At any rate I would like too follow such a > discussion. > > > > Mark > > > > > > -----Original Message----- > > From: owner-canslim@lists.xmission.com > > [mailto:owner-canslim@lists.xmission.com] On > Behalf Of Fanus > > Sent: Saturday, August 09, 2003 1:16 PM > > To: canslim@lists.xmission.com > > Subject: Re: [CANSLIM] short selling (WEBX) > > > > Rolf > > > > Yes, WON spent about 3 pages on short selling in > his > > book of about 270 pages. And in these three pages > he > > showed two chart patterns and doesn't mention any > of > > the CANSLIM attributes, or reverse of them for > > shorting. HTTMIS mentioned lots of other things > also, > > but this isn't a group to discuss HTTMIS. It is a > > group to discuss CANSLIM. > > > > Just because he mentioned short selling in the > book, > > doesn't make it CANSLIM. He also mentioned > daytrading > > and swingtrading in his book. Also not CANSLIM. If > you > > decide to use reverse CANSLIM criteria to pick > shorts > > then it is fine. But this doesn't make it CANSLIM > and > > is not mentioned by WON at all as shorting > criteria. > > Any rules you use for shorting is your rules and > not > > WON's rules for CANSLIM. > > > > To use the criteria below, where in CANSLIM, or > HTTMIS > > for that matter, is the "ANI" criteria mentioned > as > > valid shorting criteria? > > > > If you want to learn more about selling short, why > not > > find a discussion group which main goal is to > discuss > > shorting methods and criteria? I sell short > stocks > > too and I am not against shorting. I am just > against > > discussing it out of place. > > > > Best Regards > > - Fanus > > > > --- Rolf Hertenstein wrote: > > > ----- Original Message ----- > === message truncated === __________________________________ Do you Yahoo!? Yahoo! SiteBuilder - Free, easy-to-use web site design software http://sitebuilder.yahoo.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 11 Aug 2003 06:08:11 -0500 From: "Katherine Malm" Subject: RE: [CANSLIM] short selling (WEBX) Hi Harold (and all), Let's do this for the sake of discussion on the subject. Instead of me simply listing how one (or I) would go about screening for failed tops, let me ask of the group a preliminary question: What does a stock look like technically when it is *at* a top? Add your thoughts....everything that you know about the technicals of a stock that may be at its peak. Again, the underlying assumption is that for the purposes of screening, fundamentals do not matter. These signals are all technical. After that discussion is exhausted, then I'll ask a follow-on question. Katherine - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Harold Josephson Sent: Monday, August 11, 2003 1:34 AM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] short selling (WEBX) Hi Katherine, How does one screen for "failed tops"? Thanks, Harold Harold Josephson hj@hjosephson.com - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm Sent: Sunday, August 10, 2003 7:48 PM To: canslim@lists.xmission.com Subject: RE: [CANSLIM] short selling (WEBX) Hi Tomas, I think you've made a good point in saying "may be that you are using the wrong tool (CS) for the job (shorting)." Break CANSLIM into its component parts and you can take one or two of them to find short candidates, but CANSLIM is what it is because it represents a collective set of criteria for finding fundamentally attractive stocks at the right time for purchasing long positions. When it comes to shorting, there's only one thing that matters to me....technicals and a market that's heading South. The only thing "CANSLIM" about that is that I'll use the RSRank to help me find candidates. I do two things: (1) Look for failed tops (high RS), a subsequent rise that falls short of that failed top, and a continuation move down. Bingo, short candidate. (2) Look for lousy stocks that are in downtrends (low RS) that rise on low volume to the downtrend line and then make a continuation move down. Bingo, short candidate number 2. I could care less what the fundamentals were in either case, good or bad, because they don't have influence in the short term. That is, the price action of the stock in the short term (which a shorting methodology represents) is all that matters. The move isn't over a significant enough period for fundamentals to affect the price action. All in all, IMHO, trying to make a complex shorting methodology based on any of the letters in CANSLIM other than maybe I or M is a lot of unnecessary complexity for very little payback. Best resources on shorting: Dave Landry's "On Swing Trading" and Stan Weinstein's "Secrets for Profiting in Bull and Bear Markets." Keep it simple. Katherine - -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tomas Sent: Sunday, August 10, 2003 8:35 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] short selling (WEBX) Just want to put my two bits in. I currently do not short or plan to do it until I am comfortable with CS long (maybe another year). However, I would not mind at all if there is discussions on this mailing list about shorting leverage/using CS information. Having said that, I am not sure if you can use any CS information to implement a short strategy. It may be that you are using the wrong tool (CS) for the job (shorting). Or maybe not. I always try to have an open mind. Regards, tomas - --- Fanus wrote: > Rolf > > Yes, WON spent about 3 pages on short selling in his > book of about 270 pages. And in these three pages he > showed two chart patterns and doesn't mention any of > the CANSLIM attributes, or reverse of them for > shorting. HTTMIS mentioned lots of other things > also, > but this isn't a group to discuss HTTMIS. It is a > group to discuss CANSLIM. > > Just because he mentioned short selling in the book, > doesn't make it CANSLIM. He also mentioned > daytrading > and swingtrading in his book. Also not CANSLIM. If > you > decide to use reverse CANSLIM criteria to pick > shorts > then it is fine. But this doesn't make it CANSLIM > and > is not mentioned by WON at all as shorting criteria. > > Any rules you use for shorting is your rules and not > WON's rules for CANSLIM. > > To use the criteria below, where in CANSLIM, or > HTTMIS > for that matter, is the "ANI" criteria mentioned as > valid shorting criteria? > > If you want to learn more about selling short, why > not > find a discussion group which main goal is to > discuss > shorting methods and criteria? I sell short stocks > too and I am not against shorting. I am just against > discussing it out of place. > > Best Regards > - Fanus > > --- Rolf Hertenstein wrote: > > ----- Original Message ----- > > From: "Fanus" > > > > > CANLSIM is a long strategy and according to the > > rules, > > > you get out if you are in a bear market. > > > I think this type of discussions are > > > better suited for a different discussion group. > > > > I disagree. Though WON spends almost all of his > > HTMMIS pages on long > > techniques, he does discuss short selling in > > correcting or beginning bear > > markets. He even gives a couple of chart pattern > > examples, like the Head > > and Shoulders Top. I would welcome any discussion > > here from the more > > experienced members on their short techniques. If > > we are (or even if we > > aren't) at the beginning of a multi-year, mostly > > sideways market, with > > occassional bull runs, seems like effective > shorting > > could really help > > overall returns. > > > > Some specific thoughts on DMC's post (see below): > > A (annual earnings): Seems like a change in > earnings > > (for the worse) would > > be more important a specific number like 15%. > > N (new something): My two thoughts are 1. a new > > product that *doesn't* live > > up to expectations, or 2. new 52-week low. > > I (institutional): If there are large > institutional > > positions, and they > > begin to dumpp the stock, might this not drive the > > price more aggressively > > downward? > > > > Rolf > > > > > > > > --- DMC197807 wrote: > > > > P.S. [prescript]: I can't see any reason to > > > > establish (or keep) a long > > > > position on WEBX here. Too much risk for me. > > > > > > > > Mark, > > > > > > > > Welcome to the thread. I don't have any > problem > > > > with you posting your > > > > website location here; it looked pretty good > to > > me. > > > > > > > > On the subject of using canslim to find > > breakdown > > > > rather than breakout > > > > candidates, I think that's a good idea. I'm > not > > > > sure how we properly tweak > > > > the criteria, but I think it's an excellent > > topic > > > > for education here. Why? > > > > Because the M in Milscan is very, very > > precarious > > > > here and I think shorts > > > > and puts are going to smash longs and calls > over > > the > > > > next several weeks. I > > > > don't see a lot more upside to the market at > > this > > > > point. Just pulling up an > > > > SPX chart shows a very very tired market, and > > the > > > > path of least resistance > > > > looks to be southeast-, and not northeastward > > bound. > > > > > > > > With that in mind, how would be alter CANSLIM > to > > > > look for breakdowns? [I'll > > > > put commentary in brackets for breakdown] > > > > > > > > C = Current quarterly earnings per share > (should > > > > show a major percentage > > > > increase compared to the prior year's same > > quarter) > > > > [Here I think you take > > > > all earnings up to, say 10% positive. Why? > > What we > > > > are looking for are > > > > stocks which have risen with the tide in spite > > of > > > > lukewarm or poor earnings, > > > > but earnings up to 30% seem too robust to > > produce a > > > > good short.] > > > > > > > > A = Annual earnings (the company should be > > > > experiencing meaningful growth > > > > over the past five years) [Perhaps the cap on > > annual > > > > earnings growth should > > > > be 15%??] > > > > > > > > N = New products, new management, new high > > prices [I > > > > don't see how to apply > > > > this one; I don't want to exclude new high > > prices, > > > > because we're looking for > > > > overvalued stocks. Other ideas?] > > > > > > > > S = Supply and demand (small capitalization > > stocks > > > > with high trading volume) > > > > [Here, having large cap elephants could be a > > great > > > > idea > > > > > > > > L = Leader in the industry, not a laggard > [here, > > use > > > > a relative strength > > > > rating of 60 or below?] > > > > > > > > I = Institutional sponsorship (a little goes a > > long > > > > way) [Hmmmm. Do we want > > > > high institutional ownership, or is this > factor > > one > > > > to be left out > > > > > > > > M = Market direction (should be headed up). > > [This > > > > one goes first. For me, > > > > the market is facing a lot more easy downside > > right > > > > here than upside. > > > > Chances of a SPX in the 600, 700, 800 range in > > the > > > > next 3-4 months is much > > > > greater, to me, than a SPX move to 1100, 1200, > > > > 1300.] > > > > > > > > Now comes the difficulty of establishing a > > pivot, > > > > and selling at the > > > > breakdown of that point. > > > > > > > > > > > > > === message truncated === __________________________________ Do you Yahoo!? Yahoo! SiteBuilder - Free, easy-to-use web site design software http://sitebuilder.yahoo.com - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 11 Aug 2003 06:26:50 -0500 From: "Jeff Henderson" Subject: [CANSLIM] a random thought This is a multi-part message in MIME format. - ------=_NextPart_000_000F_01C35FD1.8C794FF0 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit I was thinking that accumulation/distributor indicator seems to be a valuable tool if there is a lot (for lack of a better term) of institutional sponsorship. What do y'all think? Jeff H. - ------=_NextPart_000_000F_01C35FD1.8C794FF0 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable

I was thinking that accumulation/distributor = indicator seems to be a valuable tool if there is a lot (for lack of a better term) of = institutional sponsorship.  What do = y’all think?  =

 

Jeff H.

- ------=_NextPart_000_000F_01C35FD1.8C794FF0-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 11 Aug 2003 05:03:28 -0700 From: "DMC197807" Subject: Re: [CANSLIM] short selling Katherine, Good notes on short selling. I'll talk about failed tops in a minute, but I thought your note on which elements of Milscan might apply to discovering shorts very informative. You may be right, that after determining M and taking a view on relative strength, there's not much more that Milscan can offer. However, this whole exercise (of canslim) in the first instance seems to be a scanning and screening exercise, unless you have your screening done for you by a paid service. It's a process of winnowing down 8,000 names to maybe 20 or 30 charts that you can further winnow down to 2 or 3 to really look at. At that point it's all the art of the chart. It's all a voyage to become a better investor/speculator, and anything that accelerates and clarifies that process is very very valuable, imho. When I just did a quick check through my scans of looking for weak relative strength stocks (with a coupla more criteria) I only narrowed the universe to 1200 stocks. By massaging the canslim stuff, however, the universe can shrink to the 20 or 30 charts that might be reviewable in a reasonable time period. In order to review charts, one needs a system for generating a reasonable number of charts to look at. As I have said from the beginning and each time I write on this subject, its best use for many here may be purely educational, in the sense that focusing very hard on where the market is and how to look at something like canslim not as doctrine or dogma but as a workable machine will make you a better investor in all markets, more sensitive to the what makes a good market good and a bad market bad. This is a lifelong study, not just a quick study of the XYZ system in a few hours. Specifically, if you can set up scans for canslim longs and "canslim" shorts and in bull markets your scans produce 40 long charts a day to look at and only 12 shorts, and the opposite in correcting markets, then your scans themselves become proprietary indicators of market direction, perhaps ahead of the crowd. For example, I have very simple scans which show how many stocks are testing the upper Bollinger and how many the lower Bollinger. On Friday the bottom testers outnumbered the top testers by 3:1. A day earlier they outnumbered the top testers by 6:1. Tops, failed and otherwise. Just as the Japanese candlesticks serve as excellent visual clues and mnemonic devices for recognizing patterns, the variety of names for topping patterns (head n shoulders, double top, triple top, horn top) etc. can help you focus, but not without giving you a false sense of certainty in certain instances (why, oh why, did that H&S top just keep going higher?). To me, in my simplistic approach, a failed top usually has to do with some bumps and some crosses. The bumps, or humps, are the places where the priceline has tried to continue on its trend and failed. If you have 3 of these with the middle one highest, then you have a head and shoulders; if you have only 2 of relatively equal size, you have a double top, but it scarcely matters, does it? The crosses occur when 1) the priceline crosses down through a trendline, 2) the priceline crosses down through support (from previous resistance) and 3) the priceline crosses down through an important moving average (let's take the 50 ema). Once you have something recognizable with those two phenomena, you have something you can apply your money management and trading skills to. Pricelines, trendlines, support and moving averages--those are the first things I'd look at, and then my favorite, volume. DMC - ----- Original Message ----- From: "Katherine Malm" To: Sent: Monday, August 11, 2003 4:08 AM Subject: RE: [CANSLIM] short selling (WEBX) > Hi Harold (and all), > > Let's do this for the sake of discussion on the subject. Instead of me > simply listing how one (or I) would go about screening for failed tops, let > me ask of the group a preliminary question: > > What does a stock look like technically when it is *at* a top? > > Add your thoughts....everything that you know about the technicals of a > stock that may be at its peak. Again, the underlying assumption is that for > the purposes of screening, fundamentals do not matter. These signals are all > technical. > > After that discussion is exhausted, then I'll ask a follow-on question. > > Katherine > > -----Original Message----- > From: owner-canslim@lists.xmission.com > [mailto:owner-canslim@lists.xmission.com]On Behalf Of Harold Josephson > Sent: Monday, August 11, 2003 1:34 AM > To: canslim@lists.xmission.com > Subject: RE: [CANSLIM] short selling (WEBX) > > > Hi Katherine, > > How does one screen for "failed tops"? > > Thanks, > > Harold > > Harold Josephson > hj@hjosephson.com > > -----Original Message----- > From: owner-canslim@lists.xmission.com > [mailto:owner-canslim@lists.xmission.com] On Behalf Of Katherine Malm > Sent: Sunday, August 10, 2003 7:48 PM > To: canslim@lists.xmission.com > Subject: RE: [CANSLIM] short selling (WEBX) > > Hi Tomas, > > I think you've made a good point in saying "may be that you are using the > wrong tool (CS) for the job (shorting)." > > Break CANSLIM into its component parts and you can take one or two of them > to find short candidates, but CANSLIM is what it is because it represents a > collective set of criteria for finding fundamentally attractive stocks at > the right time for purchasing long positions. > > When it comes to shorting, there's only one thing that matters to > me....technicals and a market that's heading South. The only thing "CANSLIM" > about that is that I'll use the RSRank to help me find candidates. I do two > things: > > (1) Look for failed tops (high RS), a subsequent rise that falls short of > that failed top, and a continuation move down. Bingo, short candidate. > (2) Look for lousy stocks that are in downtrends (low RS) that rise on low > volume to the downtrend line and then make a continuation move down. Bingo, > short candidate number 2. > > I could care less what the fundamentals were in either case, good or bad, > because they don't have influence in the short term. That is, the price > action of the stock in the short term (which a shorting methodology > represents) is all that matters. The move isn't over a significant enough > period for fundamentals to affect the price action. > > All in all, IMHO, trying to make a complex shorting methodology based on any > of the letters in CANSLIM other than maybe I or M is a lot of unnecessary > complexity for very little payback. > > Best resources on shorting: Dave Landry's "On Swing Trading" and Stan > Weinstein's "Secrets for Profiting in Bull and Bear Markets." Keep it > simple. > > Katherine > > -----Original Message----- > From: owner-canslim@lists.xmission.com > [mailto:owner-canslim@lists.xmission.com]On Behalf Of Tomas > Sent: Sunday, August 10, 2003 8:35 PM > To: canslim@lists.xmission.com > Subject: Re: [CANSLIM] short selling (WEBX) > > > Just want to put my two bits in. I currently do not > short or plan to do it until I am comfortable with CS > long (maybe another year). However, I would not mind > at all if there is discussions on this mailing list > about shorting leverage/using CS information. > > Having said that, I am not sure if you can use any CS > information to implement a short strategy. It may be > that you are using the wrong tool (CS) for the job > (shorting). Or maybe not. I always try to have an > open mind. > > > Regards, > tomas > > --- Fanus wrote: > > Rolf > > > > Yes, WON spent about 3 pages on short selling in his > > book of about 270 pages. And in these three pages he > > showed two chart patterns and doesn't mention any of > > the CANSLIM attributes, or reverse of them for > > shorting. HTTMIS mentioned lots of other things > > also, > > but this isn't a group to discuss HTTMIS. It is a > > group to discuss CANSLIM. > > > > Just because he mentioned short selling in the book, > > doesn't make it CANSLIM. He also mentioned > > daytrading > > and swingtrading in his book. Also not CANSLIM. If > > you > > decide to use reverse CANSLIM criteria to pick > > shorts > > then it is fine. But this doesn't make it CANSLIM > > and > > is not mentioned by WON at all as shorting criteria. > > > > Any rules you use for shorting is your rules and not > > WON's rules for CANSLIM. > > > > To use the criteria below, where in CANSLIM, or > > HTTMIS > > for that matter, is the "ANI" criteria mentioned as > > valid shorting criteria? > > > > If you want to learn more about selling short, why > > not > > find a discussion group which main goal is to > > discuss > > shorting methods and criteria? I sell short stocks > > too and I am not against shorting. I am just against > > discussing it out of place. > > > > Best Regards > > - Fanus > > > > --- Rolf Hertenstein wrote: > > > ----- Original Message ----- > > > From: "Fanus" > > > > > > > CANLSIM is a long strategy and according to the > > > rules, > > > > you get out if you are in a bear market. > > > > I think this type of discussions are > > > > better suited for a different discussion group. > > > > > > I disagree. Though WON spends almost all of his > > > HTMMIS pages on long > > > techniques, he does discuss short selling in > > > correcting or beginning bear > > > markets. He even gives a couple of chart pattern > > > examples, like the Head > > > and Shoulders Top. I would welcome any discussion > > > here from the more > > > experienced members on their short techniques. If > > > we are (or even if we > > > aren't) at the beginning of a multi-year, mostly > > > sideways market, with > > > occassional bull runs, seems like effective > > shorting > > > could really help > > > overall returns. > > > > > > Some specific thoughts on DMC's post (see below): > > > A (annual earnings): Seems like a change in > > earnings > > > (for the worse) would > > > be more important a specific number like 15%. > > > N (new something): My two thoughts are 1. a new > > > product that *doesn't* live > > > up to expectations, or 2. new 52-week low. > > > I (institutional): If there are large > > institutional > > > positions, and they > > > begin to dumpp the stock, might this not drive the > > > price more aggressively > > > downward? > > > > > > Rolf > > > > > > > > > > > --- DMC197807 wrote: > > > > > P.S. [prescript]: I can't see any reason to > > > > > establish (or keep) a long > > > > > position on WEBX here. Too much risk for me. > > > > > > > > > > Mark, > > > > > > > > > > Welcome to the thread. I don't have any > > problem > > > > > with you posting your > > > > > website location here; it looked pretty good > > to > > > me. > > > > > > > > > > On the subject of using canslim to find > > > breakdown > > > > > rather than breakout > > > > > candidates, I think that's a good idea. I'm > > not > > > > > sure how we properly tweak > > > > > the criteria, but I think it's an excellent > > > topic > > > > > for education here. Why? > > > > > Because the M in Milscan is very, very > > > precarious > > > > > here and I think shorts > > > > > and puts are going to smash longs and calls > > over > > > the > > > > > next several weeks. I > > > > > don't see a lot more upside to the market at > > > this > > > > > point. Just pulling up an > > > > > SPX chart shows a very very tired market, and > > > the > > > > > path of least resistance > > > > > looks to be southeast-, and not northeastward > > > bound. > > > > > > > > > > With that in mind, how would be alter CANSLIM > > to > > > > > look for breakdowns? [I'll > > > > > put commentary in brackets for breakdown] > > > > > > > > > > C = Current quarterly earnings per share > > (should > > > > > show a major percentage > > > > > increase compared to the prior year's same > > > quarter) > > > > > [Here I think you take > > > > > all earnings up to, say 10% positive. Why? > > > What we > > > > > are looking for are > > > > > stocks which have risen with the tide in spite > > > of > > > > > lukewarm or poor earnings, > > > > > but earnings up to 30% seem too robust to > > > produce a > > > > > good short.] > > > > > > > > > > A = Annual earnings (the company should be > > > > > experiencing meaningful growth > > > > > over the past five years) [Perhaps the cap on > > > annual > > > > > earnings growth should > > > > > be 15%??] > > > > > > > > > > N = New products, new management, new high > > > prices [I > > > > > don't see how to apply > > > > > this one; I don't want to exclude new high > > > prices, > > > > > because we're looking for > > > > > overvalued stocks. Other ideas?] > > > > > > > > > > S = Supply and demand (small capitalization > > > stocks > > > > > with high trading volume) > > > > > [Here, having large cap elephants could be a > > > great > > > > > idea > > > > > > > > > > L = Leader in the industry, not a laggard > > [here, > > > use > > > > > a relative strength > > > > > rating of 60 or below?] > > > > > > > > > > I = Institutional sponsorship (a little goes a > > > long > > > > > way) [Hmmmm. Do we want > > > > > high institutional ownership, or is this > > factor > > > one > > > > > to be left out > > > > > > > > > > M = Market direction (should be headed up). > > > [This > > > > > one goes first. For me, > > > > > the market is facing a lot more easy downside > > > right > > > > > here than upside. > > > > > Chances of a SPX in the 600, 700, 800 range in > > > the > > > > > next 3-4 months is much > > > > > greater, to me, than a SPX move to 1100, 1200, > > > > > 1300.] > > > > > > > > > > Now comes the difficulty of establishing a > > > pivot, > > > > > and selling at the > > > > > breakdown of that point. > > > > > > > > > > > > > > > > > > === message truncated === > > > __________________________________ > Do you Yahoo!? > Yahoo! SiteBuilder - Free, easy-to-use web site design software > http://sitebuilder.yahoo.com > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. > > > > - > -To subscribe/unsubscribe, email "majordomo@xmission.com" > -In the email body, write "subscribe canslim" or > -"unsubscribe canslim". Do not use quotes in your email. - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ Date: Mon, 11 Aug 2003 07:29:41 -0500 From: "Katherine Malm" Subject: RE: "M" was ([CANSLIM] for Short Selling) This is a multi-part message in MIME format. - ------=_NextPart_000_0027_01C35FDA.53F3C620 Content-Type: text/plain; charset="iso-8859-1" Content-Transfer-Encoding: 7bit Hi DMC, As a counter point of view, here are comments from Scott Evans of Schwab Capital markets from today's Mendelson Report. I have found over the years that these folks are superb technicians. Market Analysis Group A View of the Market Scott B. Evans, CMT One of the more interesting aspects of the market's correction in time over the past two months has been the persistent "wall of worry." The S&P 500 (SPX 977) remains up over 11 percent year to date and over 20 percent above its March lows, yet over the past week, the CBOE put/call ratio reached 1.02 on Thursday, and the five day moving average reached 0.92 as of the close Friday. There are decades of statistics that show a string of daily high put/call ratios preceding and marking significant bottoms in the market, yet it is rare to see such high levels when the market remains well off its lows. This is now the third time in the five months since the March bottom that the put/call ratio has registered significant concern among the public. The first was during the brief period of consolidation in May, and the second was highlighted by John Mendelson in his July 2 morning note. It is my habit to focus on what people do, not what they say, and despite the various polls that suggest otherwise, I regard the high level of put buying as quite bullish. - --Katherine -----Original Message----- From: owner-canslim@lists.xmission.com [mailto:owner-canslim@lists.xmission.com]On Behalf Of DMC197807 Sent: Sunday, August 10, 2003 6:00 PM To: canslim@lists.xmission.com Subject: Re: [CANSLIM] for Short Selling Mighty quiet out there. Further on the M! Thang, for those who are interested. Here is the Naz 100 bullish percentage index: http://stockcharts.com/def/servlet/SC.web?c=$BPNDX,uu[h,a]dbclniay[de][pc13!c20! f][vc60][i]&pref=G Most recently it was higher than it's been in relevant history (here, you can see it in the weekly): http://stockcharts.com/def/servlet/SC.web?c=$BPNDX,uu[h,a]wbclniay[df][pc13!c20! f][vc60][i]&pref=G Its recent rating of 91 is just astounding Here's the Dow: http://stockcharts.com/def/servlet/SC.web?c=$bpINDU,uu[h,a]dbclniay[df][pc13!c20 !f][vc60][i]&pref=G And the BP for the SPX: http://stockcharts.com/def/servlet/SC.web?c=$BPspx,uu[h,a]dbclniay[df][pc13!c20! f][vc60][i]&pref=G We are definitely picking up a unform pattern of highs not seen before (translation: everything is as bullish as possible, meaning there's just one way to go. if you can't get more bullish, it's the top). While you have the SPX chart open, just look at the 3 previous spikes of 77 (April 2002), 59.80 (Aug 2002) and 68.40 (Dec. 2002), and look back to what the SPX did after those moments: http://stockcharts.com/def/servlet/SC.web?c=$SPX,uu[h,a]dbclniay[df][pc13!c20!f] [vc60][i]&pref=G 77 (April 2002)--SPX went from 1150 to 775 in 5 months. 59.80 (Aug 2002)--SPX went from 965 to 768 in 1.5 months 68.40 (Dec. 2002)--SPX went from 950 to 800 in 3 months. Anyway, it's all very interesting to look at, isn't it? Elliot Wavers might see this overly bullish scenario as the setup for yet another 3-count wave down. I don't really subscribe to EW stuff, but, like FIbonacci and Gann, it's useful to at least think about. The last EW pattern, if you believe this stuff, took the SPX down from 1500 to 768, or a 50% retrace. This one, starting at 1015.40, could do some similar damage and take us down to 565-775 over a 12 month period. Some bearish reports I've see predict a SPX fall to the mid 600s before year end. Otoh, we're in the 3rd political year, and 3 and 4 are notoriously good. And, if you do a big Fibo study on the SPX since its base in 1995 at about 440, we've already done a 38% retrace (back to the 62% line). http://stockcharts.com/def/servlet/SC.web?c=$spx,uu[h,a]mbclniay[pc13!c20!f][vc6 0][i][J15983278,Y]&pref=G All things to think about on a nice, calm, summer Sunday's evening. DMC ----- Original Message ----- From: WJH To: canslim@lists.xmission.com Sent: Sunday, August 10, 2003 10:00 AM Subject: Fw: [CANSLIM] for Short Selling Sounds interesting. From: DMC197807 To: canslim@lists.xmission.com Sent: Saturday, August 09, 2003 6:41 PM Subject: Re: [CANSLIM] for Short Selling Rolf & Mark, My vote (if I get a vote) is why not discuss how to use canslim ideas to generate potential shorts? It's not like this little epistolary group hasn't gone off the track since I've been here (about 10 trading days), and it's not like it takes a lifetime to figure out Canslim in any event. It's really rather simple, and with the help of computers it's almost too easy. The real difficulty lies in disciplining oneself to limit or get rid of longs in sideways and topping markets, and be willing to reenter when the market's correction has ended and stocks are ready to rise again. You can find the names of candidates very easily for a little coin paid for a subscription to IBD and/or a subscription to canslim.net. For short discussions, let's just use the above referenced subject line "Re: [CANSLIM] for Short Selling" and the purists like Fanus et al (so far it seems to be all Fanus) can either eyeball them and delete them, or even program their Outlook Express to pre-delete all messages on the peripheral topic. I think it would be helpful to understand what kind of screen would generate the opposite of good longs in a bad market, if only for academic, mind-sharpening purposes. After all, if in traditional canslim technique you are looking for 1 or 2 stocks to buy per week in a good (M!) market, then why not reverse the order in a bad (M!) market. With that in mind, I'd like to explore what kinds of things people think would indicate a dangerous market, knowing in advance that calling a top is one of the hardest things to do BUT that falls tend to be so much more precipitous than climbs that there's gold in those hills if you can time it right and buy a put to get into position. In any event, VTO has provided a very handy site with lots of sentiment indicators: http://www.vtoreport.com/sentiment/cot.htm If you click on Sentiment and Bull/Bear you can see a very wide gap between bullish and bearish advisors, the kind which indicates a correction is coming. I'd say anytime you see a gap of 25% or more (with the bulls on top) you are looking at a dangerous situation. The Put/Call ratio has been very low and is now climbing. Again danger. The VIX has been unnaturally low for a long time, another coiled spring. For COTS, I prefer to use the Quasimodos.com site: http://www.quasimodos.com/marketrider/technical.php The articles are interesting, and to get the reports and COTs page, click here: http://www.quasimodos.com/marketrider/charts.php You can't paste the sites, but the first 3 on the right, for the Dow, the Naz and the SPX have a very interesting graphic display of the traders' positions. I don't know exactly what the timing is on these but the smart money seems to be betting against this market continuing, while the small speculators keep piling on the positions. Good bull markets (like the one we had from March to June) often begin with very small bars. DMC - ------=_NextPart_000_0027_01C35FDA.53F3C620 Content-Type: text/html; charset="iso-8859-1" Content-Transfer-Encoding: quoted-printable
Hi DMC,
 
As a counter point of view, here = are=20 comments from Scott Evans of Schwab Capital markets from today's = Mendelson=20 Report. I have found over the years that these folks are superb=20 technicians.

Market Analysis Group

A View of the Market

Scott B. Evans, CMT

One of the more interesting aspects of the market's correction in = time over=20 the past two months has been the

persistent "wall of worry." The S&P 500=20 (SPX 977) remains up over 11 percent year to = date and=20 over 20 percent

above its March lows, yet over the past week, the CBOE = put/call=20 ratio reached 1.02 on Thursday, and the five day

moving average reached 0.92 as of the close Friday. = There are=20 decades of statistics that show a string of daily

high put/call ratios preceding and marking significant = bottoms=20 in the market, yet it is rare to see such high levels

when the market remains well off its lows. This is now = the third=20 time in the five months since the March bottom

that the put/call ratio has registered significant = concern among=20 the public. The first was during the brief period of

consolidation in May, and the second was highlighted = by John=20 Mendelson in his July 2 morning note. It is my

habit to focus on what people do, not what they say, = and despite=20 the various polls that suggest otherwise, I regard

the high level of put buying as quite = bullish.

 

--Katherine

-----Original Message-----
From:=20 owner-canslim@lists.xmission.com=20 [mailto:owner-canslim@lists.xmission.com]On Behalf Of=20 DMC197807
Sent: Sunday, August 10, 2003 6:00 = PM
To:=20 canslim@lists.xmission.com
Subject: Re: [CANSLIM] for Short=20 Selling

Mighty quiet out there.
 
Further on the M! Thang, for those = who are=20 interested.  Here is the Naz 100 bullish percentage = index:
 
http://stockcharts.com/def/ser= vlet/SC.web?c=3D$BPNDX,uu[h,a]dbclniay[de][pc13!c20!f][vc60][i]&pref=3D= G
 
Most recently it was higher than it's = been in=20 relevant history (here, you can see it in the weekly):
 
http://stockcharts.com/def/ser= vlet/SC.web?c=3D$BPNDX,uu[h,a]wbclniay[df][pc13!c20!f][vc60][i]&pref=3D= G
 
Its recent rating of 91 is just=20 astounding
 
Here's the Dow:
 
http://stockcharts.com/def/se= rvlet/SC.web?c=3D$bpINDU,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pre= f=3DG
 
And the BP for the SPX:
 
http://stockcharts.com/def/ser= vlet/SC.web?c=3D$BPspx,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=3D= G
 
We are definitely picking up a unform = pattern of=20 highs not seen before (translation:  everything is as bullish as=20 possible, meaning there's just one way to go.  if you can't get = more=20 bullish, it's the top).
 
While you have the SPX chart open, = just look at=20 the 3 previous spikes of 77 (April 2002), 59.80 (Aug 2002) and = 68.40=20 (Dec. 2002), and look back to what the SPX did after those=20 moments:
 
http://stockcharts.com/def/servl= et/SC.web?c=3D$SPX,uu[h,a]dbclniay[df][pc13!c20!f][vc60][i]&pref=3DG<= /A>
 
77 (April 2002)--SPX went from 1150 = to 775 in 5=20 months.
59.80 (Aug 2002)--SPX went = from 965=20  to 768 in 1.5 months
68.40 (Dec. 2002)--SPX went = from 950=20 to 800 in 3 months.
 
Anyway, it's all very interesting to = look at,=20 isn't it?  Elliot Wavers might see this overly bullish scenario = as the=20 setup for yet another 3-count wave down.  I don't really = subscribe to EW=20 stuff, but, like FIbonacci and Gann, it's useful to at least think=20 about.  The last EW pattern, if you believe this stuff, took the = SPX down=20 from 1500 to 768, or a 50% retrace.  This one, starting at = 1015.40, could=20 do some similar damage and take us down to 565-775 over a 12 month=20 period.  Some bearish reports I've see predict a SPX fall to the = mid 600s=20 before year end.
 
Otoh, we're in the 3rd political = year, and 3 and=20 4 are notoriously good.  And, if you do a big Fibo study on the = SPX since=20 its base in 1995 at about 440, we've already done a 38% retrace (back = to the=20 62% line).
 
http://stockcharts.com/= def/servlet/SC.web?c=3D$spx,uu[h,a]mbclniay[pc13!c20!f][vc60][i][J1598327= 8,Y]&pref=3DG
 
All things to think about on a nice, = calm, summer=20 Sunday's evening.
 
DMC
 
 
 
 
 
 
 
 
----- Original Message -----
From:=20 WJH
Sent: Sunday, August 10, 2003 = 10:00=20 AM
Subject: Fw: [CANSLIM] for = Short=20 Selling

Sounds interesting.
 
From:=20 DMC197807
To: canslim@lists.xmission.com= =20
Sent: Saturday, August 09, = 2003 6:41=20 PM
Subject: Re: [CANSLIM] for = Short=20 Selling

Rolf & Mark,

My vote (if I get a vote) = is why=20 not discuss how to use canslim ideas to
generate potential=20 shorts?  It's not like this little epistolary group
hasn't = gone=20 off the track since I've been here (about 10 trading days), = and
it's=20 not like it takes a lifetime to figure out Canslim in any = event. =20 It's
really rather simple, and with the help of computers it's = almost=20 too easy.
The real difficulty lies in disciplining oneself to = limit or=20 get rid of
longs in sideways and topping markets, and be = willing to=20 reenter when the
market's correction has ended and stocks are = ready to=20 rise again.  You can
find the names of candidates very = easily for=20 a little coin paid for a
subscription to IBD and/or a = subscription to=20 canslim.net.

For short discussions, let's just use the = above=20 referenced subject line
"Re: [CANSLIM] for Short = Selling"

and=20 the purists like Fanus et al (so far it seems to be all Fanus)=20 can
either eyeball them and delete them, or even program their = Outlook=20 Express
to pre-delete all messages on the peripheral = topic.

I=20 think it would be helpful to understand what kind of screen would=20 generate
the opposite of good longs in a bad market, if only = for=20 academic,
mind-sharpening purposes.  After all, if in = traditional=20 canslim technique
you are looking for 1 or 2 stocks to buy per = week in=20 a good (M!) market,
then why not reverse the order in a bad = (M!)=20 market.

With that in mind, I'd like to explore what kinds = of things=20 people think
would indicate a dangerous market, knowing in = advance that=20 calling a top is
one of the hardest things to do BUT that falls = tend to=20 be so much more
precipitous than climbs that there's gold in = those=20 hills if you can time it
right and buy a put to get into=20 position.

In any event, VTO has provided a very handy site = with=20 lots of sentiment
indicators:

http://www.vtoreport.= com/sentiment/cot.htm

If=20 you click on Sentiment and Bull/Bear you can see a very wide gap=20 between
bullish and bearish advisors, the kind which indicates = a=20 correction is
coming.  I'd say anytime you see a gap of = 25% or=20 more (with the bulls on
top) you are looking at a dangerous=20 situation.

The Put/Call ratio has been very low and is now=20 climbing.  Again danger.

The VIX has been unnaturally = low for=20 a long time, another coiled spring.

For COTS, I prefer to = use the=20 Quasimodos.com site:

http://www.q= uasimodos.com/marketrider/technical.php

The=20 articles are interesting, and to get the reports and COTs page,=20 click
here:

http://www.quas= imodos.com/marketrider/charts.php

You=20 can't paste the sites, but the first 3 on the right, for the Dow,=20 the
Naz and the SPX have a very interesting graphic display of = the=20 traders'
positions.  I don't know exactly what the timing = is on=20 these but the smart
money seems to be betting against this = market=20 continuing, while the small
speculators keep piling on the=20 positions.  Good bull markets (like the one
we had from = March to=20 June) often begin with very small=20 = bars.

DMC
= - ------=_NextPart_000_0027_01C35FDA.53F3C620-- - - - -To subscribe/unsubscribe, email "majordomo@xmission.com" - -In the email body, write "subscribe canslim" or - -"unsubscribe canslim". Do not use quotes in your email. ------------------------------ End of canslim-digest V2 #3498 ****************************** To unsubscribe to canslim-digest, send an email to "majordomo@xmission.com" with "unsubscribe canslim-digest" in the body of the message. For information on digests or retrieving files and old messages send "help" to the same address. Do not use quotes in your message.